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FM services can be outsourced on insourced. One way or another you must have a scope of work, a set of information in order to know what is needed, when, how, by whom…to have a documented process of operations and management.

This SOW should include:

  • Assets inventory: a clear and accurate list of location, buildings equipment and other inventory
  • Risk assessment:
    • Business impact assessment BIA:
    • Other risks.
  • Service matrix – SLA
  • Performance management – KPIs: control system
  • Processes, procedures and policies, including support systems (e.g. IT systems);
  • Roles and responsibilities;
  • Price/cost structure
  • Budget information, plans for investments, capital repairs or replacement, FM services, all related with FM strategy.

I will go into more details for some of the above.

Services (SLA) should be tailored on each building classification (critical, high impact, medium impact, low impact, very low impact) and building usage (commercial, production, office, etc.).

For example, if a building is classified as Critical (Buildings/parts of buildings that contain personnel and equipment, the loss of which would have a catastrophic impact on the business and would prevent the strategic business objectives from being achieved) will have intervention time very short, and high level of prevention on hard services. One with Very Low Impact may not have prevention at all, and large time of intervention.

Another example: soft services – cleaning: the need are very different between commercial space (impact on image since this is a point of interaction with customers) and a warehouse or even office.

Processes, procedures.

First of all you will have to identify needed processes, use same process for same type of activity. For example:

  • Scheduled activity process: this can be used for preventive/predictive technical maintenance, for scheduled cleaning, etc. Same process for different activities with same pattern.
  • On request process: corrective maintenance, corrective cleaning, complains. Etc.
  • Control process: based on performance management, could be one single process for all services performed. This should include:
    • Quantitative control From “Task by task” control to “sample control”. Sample must be >10 % of work performed for each category (corrective or preventive).
    • Qualitative control From “activity done and result verification” switch to “check for failure after activity performed”

Keep it simple, avoid redundancy, avoid over control and, most important: have one!


Cost/price structure:

There can be several way to define the price structure (some examples below) but nomather what is suitable for you don’t forget to relate payments for performance!

  • Open book and fixed margin;
  • Fix price per operation (all included);
  • Fix price per man/hour for different qualification, fix price for materials.

Incentive methods:

  • Price related to performance : 100% price for 100% performance, 90% for 90%, 0 for less the 80% performance
  • Penalties and commissions: 0-80% performances penalties up to 20%; 80%-95% performances – penalties up to 10%; 95%-100% performances – commissions up to 10%.
  • Profit share: In relation to Profit share any division of savings produced by the Service Provider will be divided between the Service Provider and Client according to the terms set out in the Contract, and this will be reflected in the overall profit fee for the period involved

Written by: Eugen Ion Independent Consultant


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